Alerts

SCOTUS Nixes Mandatory Agency Fees for Public Unions

August 24, 2018

On June 27, 2018, the United States Supreme Court issued a pivotal decision in Janus v. American Federation of State, County and Municipal Employees, which overturned more than 40 years of precedent. The Janus case involved “agency fees” that unions typically require non-union employees to pay. That is, employees who are covered under a union’s collective bargaining agreement, but choose not to join the union, do not have to pay full union dues. Instead, they pay agency fees to cover the basic costs that the union incurs in representing them. In Janus, the Court held that public employee unions cannot force non-union employees to pay agency fees because this requirement violates the First Amendment.

The Janus case overturned the Court’s prior decision in Abood v. Detroit Bd. of Educ.where the Court held that agency fees were constitutional so long as the union used the fees for non-political purposes, such as collective bargaining, contract administration, grievance adjustment purposes, and other activities “germane to the union’s duties as collective bargaining representative.” The Court reasoned that there was a compelling state interest in promoting “labor peace” and avoiding the issue of “free riders”—i.e., employees reaping the benefits of union representation without paying dues.

In Janus, the plaintiff was a non-union public employee who was required to pay an agency fee that was 78.06% of total dues, or $535 annually. The plaintiff challenged the agency fee claiming that it violated the First Amendment because it was “coerced political speech.”

The Court held in favor of the plaintiff describing the Abood decision as “poorly reasoned.” It also pointed out that the decision has led to “practical problems and abuse.” The Court explicitly rejected the “labor peace” and “free rider” justifications underlying the Abood decision, concluding that these justifications did not outweigh First Amendment protections. With respect to “labor peace,” the Court noted that there are millions of public employees in states that do not allow agency-fee arrangements and unions continue to represent them. On the issue of “free riders,” the Court concluded that the issue simply does not provide a compelling interest to override the First Amendment protections at issue. As a result, the Court concluded that mandatory agency-fees are unconstitutional and that public employees must affirmatively agree to pay union dues.

The Janus decision will have a significant impact on public unions particularly in states like Connecticut, which allow agency fees. We are monitoring developments following this decision and will update you as more details unfold. Please do not hesitate to ask us any questions you might have regarding this decision and its affects.